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TMI Blog1968 (11) TMI 115X X X X Extracts X X X X X X X X Extracts X X X X ..... of its employees in that year. The company consequently decided upon a policy of reorganising its business by giving accent to its manufacturing activities'and of giving up the agencies' held by it. In pursuance of the said policy, the company relinquished between April 1, 1960 and September 30, 1961, 13 agencies in Bombay, 11 in Delhi, 8 in Madras and 11 in Calcutta. It also closed down 3 of its branches in Northern India and 11 in South India. The total staff engaged at Calcutta consisted of 75 employees in the workshop at Kidderpore and 225 in the Branch office. Apprehending that the said policy would result in retrenchment, the third respondent union wrote to the Deputy Labour Commissioner requesting him to intervene stating that the Board of Directors and the company had declared their policy of surrendering agencies and that in the result the union feared that about 60 employees would be retrenched. The Deputy Commissioner called for the comments of the company's manager, who in his reply dated June 17, 1961 affirmed that the company had taken the said policy decision in consequence of which some of the employees would have to be retrenched. On June 20,.. 1961 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... up in the name of a policy of reorganisation agencies although they were profitable, creating thereby an artificial condition to show fall in business and surplus age in staff, that the company's mala fides were apparent in that it gave up agencies in Calcutta only, that the company being dominated by persons from Madras its real object was to divert its resources to Madras from parochial and anti-union considerations, that as a result of giving up the agencies the company had suffered in profits, that the work-load of the remaining employees had increased, that there was in fact no real surplusage, and lastly, that the company had not followed while retrenching the principle of last come. first go . The cornpany's reply was that retrenchment was bona fide and in accordance with law, that it had relinquished all the pharmaceutical agencies, general sales agencies except one, and a number of other agencies not only in Calcutta but also in Bombay, Delhi and Madras, that it had absolute right to decide which business it should continue and which to give up, that as a matter of business policy it had decided to discontinue the agency business with the result that retrenchment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... however, rejected this evidence on the ground that the manager could not give evidence about the policy decision as that was the function of the Board of Directors, that the extract from the said speech reflected the policy of the East India Distilleries Co. but not necessarily of the appellant company and that the additional reasons given by the manager showed that the real reasons for giving up the agencies were those reasons and not the policy decision. The rejection of the manager's evidence was totally unwarranted and the finding that the pokey decision was not proved was contrary to the evidence on record. As akeady stated, in the union's letter to the Labour Commissioner, the union had based its request for intervention on the footing that it apprehended retrenchment as a result of the company's said policy decision. During conciliation proceedings also the manager had clarified that retrenchment was inevitable on account of the said policy decision. Besides, there was no reason why the manager could not depose about the company's said_decisiOn. The additional reasons given by the manager were the reasons to show why of the 21 agencies the particular 11 agenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear finding that the company had not resorted to retrenchment with the intention of victimisation, yet it held that the allegations made by the union (as to parochial considerations) do not appear to be unfounded or unreasonable . The reasons given for this observation were that the company's head office was at Madras, that the chairman and the directors of the company were from Madras and that the agencies given up in Madras were less in number than in Calcutta. On these findings the Tribunal held that the scheme of reorganisation was not sufficiently established, that mere surrender of agencies was no proof of such a scheme that therefore, a good case for retrenchment was not made out,. that the company had failed to establish the exact number of surplus employees and the extent of retrenchment, that it failed to observe the principle laid down in sec. 25G, that the said notice dated June 29, 1961 was not in accordance with rule 77 of the West Bengal Industrial Disputes Rules, 1958 as the notice was of June 29, 1961 while retrenchment was to take effect from, July 1, 1961. The Tribunal held that the retrenchment, therefore, was not with immediate effect, the proviso. to that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal was in error in holding that el. 1 of r. 77 of the said rules applied and that a month's notice not having been given thereunder the retrenchment was invalid.' He set aside the award and remanded the case to the Tribunal for the limited purpose of enforcing retrenchment according to the principle of last come first go . In appeal against the said judgment, a Division Bench of the High Court held that the High Court could interfere in a writ petition for certiorari with the Tribunal's findings only within well-recognized limits, such as, where the inferior tribunal has acted without jurisdiction or in excess of it or where it has acted illegally as when it acts in breach of the principles of natural justice or where there is an error of law apparent on record. The superior court in such cases acts in supervisory and not appellate jurisdiction and therefore, cannot review findings of fact however erroneous they are. The Division Bench found that the findings of the Tribunal that the company had failed to prove its scheme of reorganisation, that retrenchment was effected in Calcutta only, that the company was actuated by parochial considerations, and therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the evidence. Likewise, in the State of Andhra Pradesh Ors. v.S. Sree Ram Rao (A.I.R. 1963 S.C. 1723) this Court observed that where the Tribunal has disabled itself from reaching a fair decision by some considerations extraneous to the evidence and the merits of the case or where its conclusion on the very face of it is so wholly arbitrary and capricious that no reasonable person can ever have arrived at that conclusion interference under Art. 226 would be justified. The question for our determination, therefore, is whether the learned Single Judge was within the aforesaid well recognised limits when he set aside the award. Before, however, we examine that aspect of the case we may first consider the scope of the Tribunal's jurisdiction in cases of retrenchment arising under see. 25F of the Act. In D. Macropollo Co. v. Their Employees' Union([1958] 2 L.L.J.492) this Court held that if a scheme of reorganisation has been adopted by an employer for reasons of economy or convenience and it has been introduced in all the areas of its business, the fact that its implementation would lead to the discharge of some of the employees would have no material bearing on the q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to affect retrenchment cannot normally be challenged but when there is a dispute about the validity of retrenchment the impugned retrenchment must be shown as'justified on proper reasons,- i.e., -that' it was not capricious or without rhyme or reason. Since this is an appeal arising from a writ petition for certiorari we also would not interfere with the conclusions arrived at by the Tribunal except on grounds on which the High Court could have done. Mr. Gupte's contention was that the findings of the Tribunal were beyond its jurisdiction, that they were unwarranted by evidence on record and were based either on wrong assumptions or mere conjectures without any foundation in the evidence, and therefore, this is a fit case for our interference. It is not in dispute that the company gave up 11 out of its 21 agencies in Calcutta, that is, more than half of its agency business was given up during the years 1960 and 1961. There was clear and unchallenged evidence that certain agencies were likewise given up in other places including Madras. The manager gave evidence that this was done in pursuance of the policy decision taken by the company to reorganise its business by con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to its satisfaction that it was profitable. The Tribunal then held (a) that the scheme was' not reasonable inasmuch as the number of agencies given up in Madras was less than that in Calcutta, (b) that though development of manufacturing activity was taken up in Madras, no such activity was undertaken in Kidderpore, and (c) that the company should have developed its manufacturing activity in Kidderpore simultaneously with the surrender of the agencies. It is obvious that while reorganising its business it is not incumbent on the company to develop its manufacturing side at the very place where it has surrendered its agencies, namely, Calcutta, nor to do so at the very same time. These considerations which the Tribunal took into account were totally extraneous to the issue before it and the Tribunal ought not to have allowed its mind to be influenced by such considerations and thereby disabling itself from viewing the issue from proper perspective. It was also beyond its competence to go. into the question of propriety of the company's decision to reorganise its business. Having come to the conclusion that the said policy was not actuated by any motive of victimisation o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trenchment. So long as retrenchment carried out is bona fide and not vitiated by any consideration for victimisation or unfair labour practice and the employer comes to the conclusion that he can carry on his undertaking with reasonable efficiency with the number of employees retained by him after retrenchment, the Tribunal ought not ordinarily to interfere with such decision., The fact that in 1960 17 temporary appointments were made or that the union's secretary deposed that work had accumulated would not mean that the surplusage calculated by the manager was unjustified. Accumulation of work at a given point of time, unless it is constant, may be seasonal or due to various reasons and not necessarily because there was no surplusage. The management had worked out the surplusage which would occur in consequence of their giving up the agency business. Barring the bare statement of the union secretary that work had accumulated and that employees were doing overtime work there was no rival data available to the Tribunal to come to the startling conclusion that there would be no surplusage at all even though a little more than half of the agency business was given up. Such a concl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned Single Judge that though the notice was not given immediately after the retrenchment but two days before it, the company had substantially complied with the requirements of the proviso. The object of the proviso clearly is that where it is not possible, for an employer to give one month's notice to the two authorities concerned by reason of his retrenching the employees with immediate effect, information should be supplied to the two officers immediately after such retrenchment. H instead of giving such information after the retrenchment it is given two days before the retrenchment takes place it is hardly possible to say that the requirement of the proviso was not carried out. So long as the object underlying the proviso was satisfied it did not make any difference that information was given a little earlier than the date when retrenchment took place. We have no doubt in our mind that some of the findings arrived at by the Tribunal and which influenced its verdict were beyond its competence. The rest were either speculative or contrary to the evidence on record and were consequently liable to be set aside in a writ petition for. certiorari. The Division Bench of the Hig ..... X X X X Extracts X X X X X X X X Extracts X X X X
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